(Adds GM comment, background on Volt, bylines)

By David Bailey and Soyoung Kim

DETROIT, Jan 28 (Reuters) - General Motors Corp GM.N has suspended work on a $370 million engine plant in Michigan, forcing it to import engines for the initial production of its all-electric Chevy Volt, a senior union official told Reuters on Wednesday.

The move underscores both the pressure on GM to cut costs as it struggles to restructure under federal oversight and on the money-making potential for the plug-in hybrid vehicle.

Even before the decision to ship engines to the United States, GM executives said that they did not expect to make money on early sales of the highly anticipated car. It is scheduled to go into production in November 2010.

GM, which has been pledged $13.4 billion of U.S. government loans in an emergency bailout, said last year it would build an engine plant in Flint to support the Volt and a new small car, the Chevy Cruze.

The Flint engine plant, which was expected to open next year, was expected to build a turbocharged 1.4-liter engine for the Cruze small car and another version to extend the driving range of the Volt.

In December, as GM scrambled to save cash and stay out of bankruptcy, the automaker said it was delaying the next phase of construction for the Flint plant but said it expected the delay would be temporary.

On Wednesday, a GM spokeswoman said some construction contracts for the plant had been canceled and that it would consider other nearby options for building the next-generation of small four-cylinder engines.